US e-grocers have been testing different business models with varying results.
This research conducted a meta-analysis of six online grocers (Peapod, Tesco,
Safeway, FreshDirect, Webvan and Streamline) to identify the pattern of strategies that
contribute to their performance. Each company's management capabilities, expansion
and market selection strategy, order-picking method, delivery method, website design
and Customer Relations Management (CRM) are explored and compared to identify the
factors that provide these businesses with a greater chance of success. The findings
suggest that knowledge of and experience in the grocery business play an important
role in the success of an online grocer. Using a cautious and slow expansion strategy
helps an e-grocer stay in the game. The store-pick model is suitable for most markets,
while warehouse-pick may be used for markets with high customer demand. Each
business model allows for strategic variations.